Case-in-point, True Religion Apparel Incorporated Other Operational Disbursements. There can be a whole host of other operational disbursements, and again, we'd have to take a look at the numbers to really understand what they are. Some of the more common ones and ones that would apply in this case to TRA are insurance, including directors and officers. This is addressed very early, particularly in bankruptcy, to ensure that lapses will not create unwanted liability. Typically, these policies are paid once or twice per year and they accrue in a prepaid expense account. Rent. For a retailer like TRA, this is a huge expense, and it will get negotiated quickly in a downturn, and as we will see once we get back to the numbers in TRA, it was actually the mall operators that had a big hand in how this case actually turned out. Taxes. Now these are very challenging to predict or forecast, particularly if a company has been incurring losses. We do need to be careful to consider sales taxes and property taxes, those are much easier to forecast and those generally do get paid on time without a lot of input from accountants and tax advisors, it's very difficult to forecast provisions or benefits from taxes on earnings. Other operational expenses can include other kinds of prepaid and accrued expenses. It's very difficult to really separate a lot of these out without precise information. If there's no information given on these other accounts, what we wanna assume is that whatever's forecast on the income statement is simply cash, and that's just the most conservative way to do it. Many of these types of disbursements will impact other accrued accounts, again, like prepaid expenses on the asset side and accrued liabilities or accrued expenses on the liabilities side. It's not always possible or practical to reconcile all of those accrued accounts as we did for accounts receivable, inventory, wages, and accounts payables. Those accounts, we have generally pretty specific information about what's driving them, so again, we just try to be conservative here and assume that if there is an expense on the income statement, it's cash. If we can tie it back to a balance sheet account, we will, but sometimes, we just don't have the information. Another major operational expense is Capex. Sometimes we don't think of Capex as being operational because on the traditional cash flow statement, it has a separate category in the investing section. Capex, we are generally thinking about maintenance and scheduled large capital expenditures here, so this should be very scaled back. At this point, there may be a forecasted regularly occurring amount or it might be in lumps. We generally assume when we're given a cash Capex forecast that it is already in cash and there's no accrual adjustments needed. Because we're dealing with a cash flow model, we're not going to do a lot with depreciation, but occasionally, there is some work that has to be done with depreciation, and we also like to have depreciation in the numbers because it is important for us as we'll see at the end of building a 13-week cash flow statement to be able to reconcile that back to EBITDA. EBITDA will always remain a very important component of any credit-based activity because EBITDAs so entwined in the loan agreements, the covenants, and the documents. The last thing we need to consider before net cash flow are the non-operational disbursements. In general, these are the interests and the fees. The interest is typically accrued on the income statement, but more realistically, it's only paid in cash once per quarter or maybe semi-annually, depending on the debt instrument. In addition to this, there're a lotta fees for companies that are either in bankruptcy or approaching bankruptcy, there's advisory fees, there's a lot of legal fees, and these will get estimated and paid once per month or once per quarter. In a bankruptcy, these fees are carved out and given priority to make sure that the people that are helping the company get through this process are getting paid. It is also important to consider if additional financing is needed, what will the interest and fees be on that as well?
